Management Moonshots — Part III

By Gary Hamel

In my last post I shared ten “moonshots for management.” These were the product of a robust discussion I hosted last year which brought together 35 of the world’s most distinguished business thinkers. Herewith, the rest of the “top 25,” which I wrote about in-depth in February’s Harvard Business Review.

11. Dramatically reduce the pull of the past.
Management processes often contain subtle biases that favor continuity over change. While continuity is important, these subtle baked-in preferences for the status quo must be exposed, examined, and, if necessary, excised.

12. Share the work of setting direction.
To engender commitment, the responsibility for goal-setting must be distributed through a process where share of voice is a function of insight, not power.

13. Develop holistic performance measures.
Existing performance metrics often take scant account of the subtle, yet critical, factors that drive competitive success in the creative economy. To overcome these limitations, companies will need to create more holistic measurement systems.

14. Stretch executive time-frames and perspectives.
Compensation and incentive systems often truncate executive time horizons and skew perspectives. There is a need, therefore, to invent new incentive systems that focus management attention on creating long-term stakeholder value.

15. Create a democracy of information.
To make timely decisions that reflect the best interests of the entire company, grassroots employees need to be the best-informed individuals within the organization. In a volatile environment, the costs of information-hording are untenable.

16. Empower the renegades and disarm the reactionaries.
Traditional management systems often give a disproportionate share of power to top-level executives who have a vested interest in preserving the status quo and are eager to defend it. Instead, more power needs to be vested in those who have their emotional equity invested in the future.

17. Expand the scope of employee autonomy.
To become more adaptable and innovative, companies will have to substantially enlarge the freedom of front-line employees to collaborate, experiment, and initiate change. Management systems that systematically sacrifice freedom for discipline will have to be re-engineered.

18. Create internal markets for ideas, talent, and resources.
In general, markets are better than hierarchies at allocating resources. Companies should exploit this fact by developing market-based mechanisms for the allocation of ideas, talent and capital.

19. Depoliticize decision making.
Top-level decisions are often contaminated by hubris, nostalgia and myopia. To avoid these pitfalls, decision processes must drawn on the collective wisdom of the entire organization and be entirely transparent.

21. Further unleash human imagination.
In democratizing the tools of innovation, the Internet has unleashed a tidal wave of human creativity. Managers must learn from this, and do much more to equip employees at all levels with the tools and skills they need to be inspired business innovators.

22. Enable communities of passion.
To maximize innovation and employee engagement, management systems must facilitate the formation of self-defining communities of passion. Individuals must be given the chance to form their own work groups and choose their own colleagues based on shared goals and mutual interests.

23. Retool management for an open world.
Value-creating networks often transcend the firm’s boundaries and can render traditional power-based management tools ineffective. New management tools are needed that can help business leaders to build and mobilize these extended networks.

24. Humanize the language and practice of business.
The typical business goals of market share, profitability and growth do little to stir human hearts. Tomorrow’s management systems must give more credence to timeless human ideals, such as love, beauty, and justice, that have the power to inspire extraordinary accomplishment.

25. Retrain managerial minds.
Too often the managerial brain has a left hemisphere that’s as big a watermelon, and a right hemisphere that’s the size of a walnut. In executive education and recruitment, the traditional focus on deductive and analytical skills must be complemented by a renewed emphasis on conceptual and systems-thinking skills.

Readers, do you know of any organizations (maybe yours) that have made headway on any of these moonshot challenges—and in so doing have developed some truly distinctive management practices?

(And if you’d like to participate in a Harvard Business Review survey on these moonshots, please click here.)

Comments (5 of 10)

To reconstitute the practice of management, part of the answer will be in how we train and educate managers. In particular, how will the MBA degree have to evolve -- in curriculum, pedagogy, and students -- in order to improve management in the 21st century? Will that education have to evolve or are we satsfied with the education of our future business leaders? How should we measure the efficacy of that education, and should those measures also evole over time?

5:21 pm March 25, 2009

Jimbo wrote :

In reading anything from Gary Hamel, consider the source was Enron's no one fan. From his own web soite:

"But can you run a Fortune 500 company the way a venture capitalist operates?
The goal is not to turn Fortune 500 companies into venture capital companies. I believe we are heading for a synthesis between these two models.

Let me give you an example. Enron has an incredible track record of creating bold new businesses built on radical new business models. They did it when they pushed natural-gas deregulation in this country. They did it when they created EnronOnline, which today is the single largest online business in the world. It does more than $500 million of transactions a day. They did it when they created Enron Energy Services, which outsources energy. They did it when they moved into the market for selling broadband.

Now, Enron has achieved this almost magical mix of entrepreneurship inside with the ability to leverage enormous scale and discipline to get things done. There is not a dot-com in the world that could have accomplished what Enron did [with EnronOnline]. Trading energy is enormously complex; there are hundreds of pages of contractual fulfillment on any transaction. And Enron did this in less than a year from a standing start, and it started with a 29-year-old woman on a gas trading desk in London. In fact, the system was two months from going live before they told the chief executive and chairman what they were up to.
"

10:49 am March 25, 2009

Bob Braddock wrote :

First, kill all the lawyers. Management, through no fault of their own, have to spend an inordinate amount of time crossing T's and dotting I's, ensuring that regulators, disappointed shareholders, disgruntled employees, or dissatisfied customers can't point to some action, or lack there of, as being "irresponsible" (i.e., non-standard). Fear of litigation is probably the biggest obstacle to significant innovation. Without the annual formal performance review, useless and time-consuming though it may be, do you face having to defend every decision on raises, promotions, reassignments and terminations in court? If an IT sytems failure disrupts your business, even briefly, do you face shareholder and customer lawsuits because you didn't have rigourous, multi-level review and approval processes in place, even if such processes would not have prevented the failure? Much of the rigid conformance to past practice is because it is defensible in court; it's armour to protect the enterprise from litigation, and as with armour, the protection comes at the cost of mobility.

2:55 pm March 19, 2009

Bill Nobles and Paul Staley wrote :

Gary, these 25 issues resemble Thomas Kuhn’s definition of anomalies that can be resolved only by a management paradigm shift—or the “mental revolution” your book suggested could be required for Management 2.0. Many address organizational strengths long thwarted by hierarchical control — “work serving a higher purpose,” “community and citizenship,” “trust,” “diversity,” “strategy emergence,” “democracy of information,” “autonomy,” “decision making,” “imagination,” and “passion.” Others discuss long-recognized hierarchical control problems—“reconstructing the philosophical foundation,” “eliminating pathologies of formal hierarchy,” “reinventing the means of control,” “redefining the work of leadership,” “de-structuring and disaggregating,” “depoliticize decision making,” “humanize the language and practice of business,” and “retrain managerial minds.”

Our research revealed a candidate for the needed “mental revolution” and for your Moon Shot—the management paradigm shift to “vision-led freedom” which well-known leaders used for decades to out-perform the S&P 500 by factors of 7 ½, 9, 10, and 35. This provides an alternative for trying to prioritize largely unsolvable issues. You can consider whether this paradigm shift resolves most, and if so further consider whether “vision-led freedom” provides the foundation for Management 2.0 required to reignite management innovation. Our email address is billnobles@optonline.net, and a draft of our book is available at http://cid 83470ecf87a26ca6.skydrive.live.com/self.aspx/Freedom-Based%20Management/Draft,%20Freedom-Based%20Management.pdf?wa=wsignin1.0&sa=420143232

1:44 am March 19, 2009

Larry Underwood wrote :

Corporate America has created a culture of micro-management, finger pointing and backstabbing, based on one underlying cause: Fear. Big corporations, especially in this litigious day and age, are very fearful that any flaws within their organization, which may result in possible lawsuits---sexual harassment, wrongful termination, discrimination, or some other miscellaneous negligence claims---could cost them millions of dollars.

Entreprenuerial companies which used to provide a positive environment for its employees, giving them at least some degree of autonomy, which in turn results in better productivity and customer service, now seem to have little or no regard for its front line employees, resulting in bad customer service and lower productivity. With employees seeing little or no hope for a rewarding career, turnover is high, while its business, naturally, continues to suffer.

The problem starts at the top, with the CEO, and filters down to each layer of managment, who fearful of being blamed for something that went wrong, make sure they micro-manage their people to death, and so on and so forth. Of course, when something does go wrong, that's when the finger pointing and backstabbing begins. It's a vicious cycle.

I spent 26 years working for a company, Enterprise Rent-a-Car, who gradually evolved into a bureaucratic corporate hierarchy, distancing themselves so much from the disillusioned front line employees, their current turnover rate is at an all-time high, and that's certainly hurt their bottom line. The company that always prided itself on never having to lay an employee off in its 50 plus years of doing business, started laying off thousands of employees last October, including over 200 at their corporate office alone. This process will more than likely continue, as the company continues to struggle.

However, it's highly unlikely the micro-management is going to stop any time soon.

For my irreverent perspective of life in Corporate America, from one of Enterprise's top (former) executives, you might enjoy my book, "Life Under the Corporate Microscope".

About Gary Hamel's Management 2.0

Gary Hamel is a management author and consultant. His books include “Leading the Revolution,” “Competing for the Future,” and “The Future of Management.” He’s a visiting professor at London Business School and director of the Management Lab.